Earnings Miss: Viavi Solutions Inc. Missed EPS And Analysts Are Revising Their Forecasts

Viavi Solutions Inc. (NASDAQ:VIAV) shareholders are probably feeling a little disappointed, since its shares fell 5.6% to US$7.56 in the week after its latest third-quarter results. Revenues came in at US$246m, in line with estimates, while Viavi Solutions reported a statutory loss of US$0.11 per share, well short of prior analyst forecasts for a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Viavi Solutions

Taking into account the latest results, the most recent consensus for Viavi Solutions from seven analysts is for revenues of US$1.05b in 2025. If met, it would imply a credible 4.1% increase on its revenue over the past 12 months. Earnings are expected to improve, with Viavi Solutions forecast to report a statutory profit of US$0.39 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.09b and earnings per share (EPS) of US$0.48 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 20% to US$10.33. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Viavi Solutions analyst has a price target of US$13.00 per share, while the most pessimistic values it at US$9.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Viavi Solutions shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Viavi Solutions' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.2% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 0.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.6% per year. Although Viavi Solutions' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Viavi Solutions' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Viavi Solutions going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Viavi Solutions you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.